Eternal Trusts Review

PROJECT SUMMARY

Eternal Trusts is the world’s first fiduciary crypto protocol for creating decentralized apps that securely administer crypto assets through collective decision-making. It replicates the traditional “purpose trust” framework with crypto technologies, making it flexible, transparent, and affordable for the end user. ET Protocol is powered by EOS.IO, one of the fastest blockchains with low transaction fees, and by Hyperledger of IBM.

PROBLEM STATEMENT: THE TRUST INDUSTRY AND ITS ISSUES

The fiduciary market

A fiduciary is an individual or organization legally responsible for managing assets on behalf of someone else, usually called the beneficiary, or for executing some charitable or non-charitable purpose. The assets must be managed in the best interests of the beneficiary, not for the personal gain of the fiduciary.

The aging population is expected to drive an unprecedented transfer of wealth between generations. According to the Social Welfare Research Institute at Boston College, more than $ 41 trillion of assets will be transferred between generations from 1998 to 2052 in the United States only. This process of wealth transfer is highly complicated and requires collaboration with trustees, lawyers, and estate planning agents to create wills, trust deeds, amendments, to register those documents with authorities and act upon them.

PROPOSED SOLUTION

The ET Protocol

Eternal Trusts is an EOS-based fiduciary crypto protocol. It allows financial service providers to build secure & fast decentralized applications that can integrate collective decision-making into asset administration.

As an open source protocol, Eternal Trusts allows traditional trustees, family offices, and estate planning institutions interested in accepting cryptocurrencies or integrating blockchain into their business processes to offer a brand new model of trusted asset administration to their clients. Eternal Trusts provides a robust and more publicly accessible set of mechanisms based on smart contracts and will cause the proliferation of a new distributed ecosystem of cutting edge fiduciary services, potentially allowing a wide range of people to attain long-term fiduciary purposes that best suit their needs.

Unlike in traditional centralized trusts, the trustee powered by ET Protocol is represented by:

· The system of Smart contracts -- blockchain algorithms that work as real world paper contracts but do not require a centralized arbitrating party.

· Networks of Oracles -- groups of trusted parties selected by the dApp founders to be in control of asset administration for their clients, and rewarded for optimal decisions.

· ET Token -- a smart contract-based medium of exchange that is used by all participants of the Protocol.

The combination of these 3 components implements so-called P urpose Execution Flow, advanced algorithm that autonomously fulfills asset administration goals.

ET Protocol provides the following built-in mechanisms:

· A customizable dApp with an interface for onboarding clients, determining their goals, beneficiaries, trusted parties, and potential “triggers” for transactions

· A framework for recording private and public data of the clients onto the blockchain for indefinite, secure storage

· A system of smart contracts that establishes rules of interaction between participants

· A wallet for accepting, trading, and storing cryptocurrencies

· Highly configurable centralized or decentralized decision making mechanism

· Assignment of specific roles for trusted parties that can freeze or release assets through the multisignature mechanism

· A reward system for optimal actions on behalf of the client

· Vetoing transactions by clients or his/her trusted parties

· Inherent dispute resolution mechanism

· Asset management through tokenization

· Anonymization of the source of funds and encryption of client’s data

Any dApp founder, be it a trustee or a bank, can attract and incentivize multiple pools of experts, organizations and AI-algorithms that can become responsible for constantly breaking down the settlors' long-term objectives into smaller parts and seeking the most reliable providers that can complete them in the most optimal way. A dApp built on the Eternal Trusts platform is unable to avoid fulfilling the undertaken obligations written into the blockchain for autonomous execution. The flexible autonomous system, called Purpose Execution Flow, initiates the voting process on preset triggers, finds the most optimal solutions for the client with the help of Oracles, analyzes potential contractors and, if they meet the predetermined set of reliability criteria, proceeds to purchase the services that the client requires.

The benefits for the Trustees powered by the ET Protocol:

1. Safety of assets

Assets are protected from all legal claims and are impossible to withdraw without the whole dApp network agreeing to the solution.

2. Earning more on managing assets through tokenization

Crypto assets can be distributed among a variety of asset classes via tokenized ETFs, equities, FI, REIT, etc. to provide reasonable risk/returns ratio.

3. Smarter decision making

The ET-powered trustees can Integrate expert networks and AI to solve any fiduciary purpose of the client.

4. Faster operations

Decisions can be made remotely and are only limited by the speed of the blockchains used.

5. Perspective for new markets & services

Trustees can scale their services onto new markets of crypto enthusiasts, the low/mid income and developing markets, or solve a wider range of purposes for their current target audience.

6. The protocol is flexible & Modular

If needed, trustees may integrate only what their company needs, be it cryptocurrency payment gates or the full decision making process. The protocol provides varying levels of trust structure, privacy, and voting rights highly configurable by the dApp founders.

The business model for the original ET dApp

In the first ET-dApp, in accordance with the so-called Purpose Execution Flow implemented by the protocol, all clients are supposed to purchase ET Tokens and go through onboarding services with Oracles to get everything customized – this part of the business process is paid with the initial fee, to be adjusted by the dApp founders if needed. Within the lifecycle of a product or service, the client pays transactional fees that may be of a different nature. It is recommended to purchase one specific service regularly, at least once a year – that is a revision of an investment strategy for the client’s assets. There are no more compulsory fees included in our financial model in order to keep it reasonably pessimistic and simple to verify. To sum up, there are three main sources of revenue for the original dApp. They can be 100% tokenized, i.e. paid by ET tokens, or can be paid as a part of the traditional management fee as a portion of Assets Under Management (AUM) in case of long term purposes:

ET dApp Long-term Purposes

ET dApp Dynasty Support Algorithm

Objective – replicating the model of a Dynasty Trust, which provides all kinds of support for the family members of the client for an unlimited amount of time.

Solution – Finding asset managers that would secure returns of traditional developed liquid markets and sending generated income via smart contracts to the wallets of the given beneficiaries after the dApp receives external triggers (age of the beneficiary, educational degree, marital status, loss of legal capacity of the settlor, etc)

Tasks for Oracles – to properly identify preset triggers, to properly identify beneficiaries, to ensure the safe and reliable transfer of assets, and to check that payment was received

Initial assets to be input – cryptocurrency, not less than 10 ETH

PARTNERS

ET-dApp vs ET-Protocol

The step towards creating the full-scale protocol has been perhaps the most crucial milestone that can increase the magnitude of the project and its impact on the whole blockchain ecosystem. On one hand, the decentralized application of Eternal Trusts (ET-dApp) will consist of an integrated and stable network of DAO directors, with an initial network of oracles and providers preselected by the founders that will be working with a single customer base.

On the other hand, the open source protocol in development (ET-Protocol) will allow for the creation of new ET-dApps on its basis using the ET token. Any company interested in integrating such mechanism of the decentralized trust into its business processes can do this by spawning a network of DAO directors and a network of oracles and contractors, setting up hosting and executive logic in private nodes and off-chain networks.

How is the ET Protocol used

The Eternal Trusts multi-DAO protocol is the first blockchain-based mechanism of establishing crypto trusts — organizations that have fiduciary duties to manage and spend assets on behalf of the clients. These organizations are essentially private/anonymous co-ops comprised of multiple participants with different roles and aimed at spending assets for specific purposes in a transparent and autonomous way.

In order to integrate our protocol for safe and secure distribution of crypto assets and start using it immediately to achieve clients’ purposes, a business owner, trustee, or a family office should establish a decentralized autonomous organization with a network of DAO directors and set up the initial set of DAO rules through voting. These rules, including all fees and parameters, can be modified later through similar voting procedures.

After the initial steps, the DAO directors should gather and choose other participants of the protocol and assign roles. They need to form their own network of oracles (experts, arbiters, and assistants) or choose an already established one with a good track record, set up servers to store and process private data (sidechain nodes) and start attracting clients that want to fulfill their own fiduciary objectives.

Potential clients interested in executing their long-term purposes can begin their communication via the Eternal Trusts application or directly via the front office of the DAO, and formulate objectives to be autonomously fulfilled later.

After formulating the purpose that needs to be fulfilled, the client should choose the most suitable solution among all the proposals and assign a Protector from a close trustworthy person (e.g., a family member). The Protector is able to withdraw funds to the initial wallet of the client in a critical situation. When the clients arrive on the platform, they have to transfer their crypto assets onto a smart contract, initially with an ability to return those assets if needed through a special type of transaction. However, in the end the clients must revoke their rights to the assets and entrust them to the DAO in order for it to begin managing their assets and fulfilling their purposes. If the service is not good enough, the client or the Protector can initiate the process of removing the DAO and replacing it with a more suitable one.

Once a predefined trigger is set off, a series of voting by oracles begins that determines what must be done optimally in the best interests of the client. When the optimal solution is formulated and voted on, the necessary amount of crypto assets is made available using the multisignature protocol by some of the DAO participants and sent to the wallet of the service provider, or a mediator that can receive crypto and send fiat to the provider. The payment is finally confirmed by an Oracle-Arbiter, assigned by the DAO or the client.

This intricate, but easy-to-use system can give fiduciary companies, multi family offices, trustees, and other businesses in need of the fiduciary process an unprecedented flexibility, optimization, and security.

SEE ETERNALTRUSTS TEAM